This paper explores the link between short-run cycles and long-run growth by examining the cyclicality of Ramp;D. Existing theories propose that Ramp;D is concentrated when output is low, but aggregate data repeatedly show that Ramp;D appears procyclical. We estimate the relationship between...

We propose corruption can substitute for conventional collateral in enforcing financial commitments when institutions are poor. A theoretical framework with agency frictions is built, in which corruptive relations with government officials keep firms committed to loan payments. Based on this...

This dissertation explores the interactions between resource reallocation, productivity dynamics and business cycles. A theory that combines two driving forces for resource reallocation, learning and creative destruction, is presented to reconcile several empirical findings of gross job flows....

Past empirical studies have repeatedly found the link between plant life cycle and aggregate employment dynamics: cross-section aggregate employment dynamics differ significantly by plant age. Interestingly, the dynamics of plant-level productivity distribution also display a strong age pattern....

Recessions often coincide with intensified restructuring. The conventional Schumpeterian view argues that recessions promote allocative efficiency by driving out less productive firms and freeing resources for more productive uses. This paper proposes that the conventional cleansing effect is...

This paper explores the link between short-run cycles and long-run growth by examining the cyclical properties of R&D at the disaggregated industry level. The relationship between R&D and output is estimated using an annual panel of 20 U.S. manufacturing industries from 1958 to 1998. The results...

This paper explores the role that recessions play in resource allocation. The conventional cleansing view, advanced by Schumpeter in 1934, argues that recessions promote more efficient resource allocation by driving out less productive units and freeing up resources for better uses. However,...

Schumpeter (1939) proposes that recessions have virtue in promoting growth-enhancing activities. However, this view is often at odds with data, as many innovative activities appear pro-cyclical. We revisit the "virtue of bad times" theoretically and empirically. Our theory suggests that...

We propose cyclical persistence as an important factor influencing the timing of innovation. Schumpeter (1939) argues innovation should be concentrated during recessions when its marginal opportunity cost as forgone output is low. We propose the timing of innovation should be affected...